Editor's PiCK
[New York Stock Market Briefing] 'Weakness amid Geopolitical Tensions Despite US-China Agreement'
Summary
- On the 11th, the New York Stock Exchange reported weakness, citing that despite the US-China second trade negotiation agreement, geopolitical tensions came to the forefront.
- President Trump noted that the lifting of China's rare earth export controls and US core Consumer Price Index (CPI) inflation in May came in below expectations, positively impacting the market.
- However, the heightened tensions in the Middle East and the subsequent international surge in oil prices were reported to have negatively affected investor sentiment.
On the 11th (local time), the New York Stock Exchange closed lower. Although the United States and China reached an agreement in the second round of trade negotiations, details have not yet been disclosed, and heightened geopolitical tensions in the Middle East have raised investor concerns.
On this day in New York, the Dow Jones Industrial Average ended at 42,865.77, down 1.10 points (0.00%) from the previous session. The S&P 500 index closed at 6,022.24, down 16.57 points (-0.27%), and the tech-focused NASDAQ index finished at 19,615.88, down 99.11 points (-0.50%) from the previous session, respectively.
The main indices opened slightly higher, buoyed by the news that the second US-China trade negotiations had produced a framework to implement the first-round agreements.
US President Donald Trump posted on Truth Social, stating that “all necessary rare earths will be supplied by China in an ‘up front’ format,” announcing the lifting of export controls.
Despite President Trump’s persistent tariff policy, the fact that US consumer price inflation in May did not rise as much as feared was also positive for the market. According to the US Department of Labor, the core Consumer Price Index (CPI), which excludes volatile energy and food prices, rose 2.8% year-on-year in May, remaining unchanged from April and below market expectations (2.9%).
However, the New York market reversed into weakness in the afternoon as concerns over escalating tensions in the Middle East were highlighted.
Reuters and the AP reported that the US government ordered the withdrawal of non-essential staff from the US Embassy in Iraq due to heightened security risks in the Middle East. With the sixth round of US-Iran nuclear negotiations expected soon, Iran has warned that it could attack all US military bases in the Middle East should the talks break down and conflict arise.
Meanwhile, due to rising geopolitical tensions in the Middle East, international oil prices surged by more than 4% on the day.
On the ICE futures exchange, the front-month Brent Crude futures price settled at $69.77 per barrel, up $2.90 (4.34%) from the previous day.
At the New York Mercantile Exchange, the front-month West Texas Intermediate (WTI) price settled at $68.15 per barrel, up $3.17 (4.88%) from the previous day.
This is the first time in two months that Brent Crude has risen above the $69 level per barrel since President Trump announced mutual tariff policies in early April.
Shin Min-kyung, Hankyung.com reporter radio@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
